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Funding Rules Test Schools

State Laws Keep Some Districts in Oil-Boom Areas From Reaping Full Benefits

By

Ana Campoy

Updated Nov. 20, 2012 7:50 p.m. ET

KARNES CITY, Texas—The school district in this ranching community has long been among the poorest in the state—and it remains so, local officials say, even though an oil boom has sent property values surging eightfold in the past two years.

But that jump in value has changed the town's designation to "property wealthy" from "property poor," under Texas' school-funding formula. That means the town can't keep most...